Question
In a make or buy decision, which of the costs below are relevant? Only direct material costs. Only conversion costs. Fixed costs that will not
In a make or buy decision, which of the costs below are relevant?
Only direct material costs.
Only conversion costs.
Fixed costs that will not change regardless of the decision.
Fixed costs that can be avoided in the future if the decision is to buy.
Costs that are always relevant in decision-making are:
avoidable costs.
future costs.
fixed costs.
sunk costs.
Tolar Company has 400 obsolete desk calculators that are carried in inventory at a total cost of $26,800. If these calculators are upgraded at a total cost of $10,000, they can be sold for a total of $30,000. As an alternative, the calculators can be sold in their present condition for $11,200.
The sunk cost in this situation is:
$11,200.
$10,000.
$26,800.
$0.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started